New Listing Watch -- summer doldrums?

The number of new listings in the past two weeks (108 single family homes and 111 condos) was down noticeably compared to the prior two week period (91 single family homes and 152 condos) and down significantly compared to the same period last year (136 single family homes and 177 condos).

Also worthy of note, the number of new listings of condos and single family homes was approximately equal, something that hasn't happened since the beginning of 2016.

The percentage of those new listings in the last two weeks that went into contract was up compared to the prior period (9.3% vs 7.7% of single family homes and 17.1% vs 3.9% of condos).  Compared to a year ago the percentage of single family homes that went into contract in the same two week period remained virtually the same (9.3% vs 10.3%).  However, there was a significant jump in condos going into contract ( 17.1% vs 9.0%).

The number of price reductions compared to the prior period remained unchanged for single family homes (16) but dropped significantly for condos (16 vs 41).  Compared to the same period last year the number of price reductions dropped in both groups (16 vs 20 single family homes and 16 vs 39 condos).

New Listing Report - Summer Doldrums

New listings for the past two weeks jumped back up to more normal levels. There were 243 new listings (91 single family homes and 152 condos) compared to 158 (62 single family homes and 96 condos) during the previous two weeks and compared to 313 (136 single family homes and 177 condos) a year ago.

However, new listings are still running well below levels in 2016 and 2015.

The number of price reductions increased somewhat compared to the previous period (16 single family homes vs 14 and 41 condos vs 31).  Compared to a year ago price reductions are stable (57 vs 59 a year ago).

San Francisco 6 month review

Is the San Francisco real estate market one of the most expensive places to buy property?  After a review and analysis of the first six months of 2017 activity you can decide for yourself. 

First a few general data points.  42% of closed residential transactions were single family homes; 58% were condominiums/TICs/co-ops. 

Over 67% of residential sales have a sales price over $1million.  Available inventory is at a seven year low.  In 2010 at the beginning of July there were about 1,106 residential properties (single family homes and condos/TICs/co-ops) on the market.  At the beginning of July 2017 there were only 330.   When compared against typical monthly sales volume, this represents about three weeks of inventory for single family homes and four to seven weeks for condos.

When broken down into price ranges the single largest category of sales is the $1million to $1.5million range at 33%. Then comes the $800k to $999k range at 17.4% followed by $1.5million to $2million at 16.4%.  At the extremes of our market the $0 to $500k range accounts for only 2.2%.  The $2million to $2.5million range has 6.6% and the over $2.5million range accounts for 10.6%.

Looking at the five most popular residential configurations for more clarity, we track 3/2 and 2/1 (bedrooms/baths) single family homes, and in the condo category 1/1, 2/1 and 2/2 (bedrooms/baths). 

Property type**	# of sales	Average sale price (000s)	Low sale price (000s) ***	High sale price (000s)	Average days on market	Sale price premium*	Available inventory
2/1 single family	183	$1,067	$491	$2,513	42	121%	3 weeks
3/2 single family	189	$1,454	$659	$3,700	20	115%	3 weeks
1/1 condo	336	$791	$223	$1,570	34	105%	6 weeks
2/1 condo	151	$1,092	$342	$1,925	25	114%	4 weeks
2/2 condo	361	$1,342	$250	$3,055	33	106%	7  weeks

*Sale price divided by listing price.

** These five categories represent about 51% of the total residential sales as reported in the San Francisco Association of Realtors MLS.  Most new construction condo units being sold by the developer do not appear in the MLS. 

*** Most of the low sale prices were properties that have their original and resale prices restricted through various government programs designed to preserve affordable housing.

Current detailed reports can be found at www.boldsf.com/Statistics

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Overall Trends Affecting the San Francisco Housing Market

Interesting analysis that appeared recently in the Business Insider: "San Francisco Housing Market May Have Peaked".

While I disagree with the headline and the metric the author uses to arrive at his conclusion, some of the underlying employment and job growth numbers bear watching.

My biggest disagreement with his "housing market may have peaked" statement is the use of "Federal Housing Finance Agency House Price Index" which is based on mortgages that lenders sell to Fannie Mae and Freddie Mac.  Those mortgages are capped at $636,000.  Assuming 20% down, that mortgage would support a sale of $795,000.

We know that average home prices in San Francisco are well above that figure.  Only 15% of sales this year have been under $799,000 (see our Sales by Price Range report).   So his conclusion is based on data that ignores 85% of the market.

Nevertheless, the slow down in job growth and labor force are worth keeping in mind.

Sales Are Up but Inventory is Down -- what's going on?

For the first half of 2017 the number of residential sales recorded by the San Francisco MLS is up almost 9% compared to the first half of last year -- 2,533 vs 2,332. 

That's the busiest first half since 2014.

But looking at active listings during the first week of each month it is clear that listings are not keeping pace with sales.

This graph shows active listings at the beginning of each month for years 2010 through2019.  Each year follows roughly the same month-to-month pattern -- low numbers in January building to a peak in May/June followed by a lull in July/August followed by another peak in October and then falling off through the end of the year.  The last three or four years active listings have been very low compared to the four previous years.

This trend can be seen on a monthly basis.  Here we show the number of active listings by the five categories of single family homes and condos we track.

Single family homes (both 3/2 and 2/1)and 2/1 condos show the fewest listings while 1/1 and 2/2 condos have significantly more.

New Listing Market Watch -- Where's the Inventory?

During the last two weeks the number of new listings plummeted by 48% compared to the prior two week period and 56% compared to the same period last year.

The drop in new listings affected both single family homes and condos.  There were 62 new listings of single family homes compared to 133 during the prior period and 197 during the same period last year.  96 new listings of condos came on the market compared to 170 during the prior period and 156 during the same period last year.

Put another way, we had more new listings of just single family homes during the same period a year ago than the combined total of new listings for both condos and single family homes during the last two weeks.

Some of this fall off can be attributed to the downturn we see every year at this time as the graph above shows.  But the drop off in new listings is more pronounced this year and that follows a lower than usual level of new listings during this year's spring market.

It's not surprising with the drop in new listings that fewer new listings went into contract.

It's also not surprising that the number of price reductions has dropped compared to the prior two week period and compared to the same period a year ago (which was the second highest for 2016).  There were 14 price reductions of single family homes compared to 22 during the prior two week period and 55 a year ago.  Condos saw 31 price reductions compared to 33 during the prior period and 41 compared to a year ago.

Apparently this lack of inventory is being felt in many housing markets around the country.  It's even alluded to in the headline of my prior post.

RISMedia Power Broker Rankings

A report out today from RIS Media today shows that our brokerage, Berkshire Hathaway HomeServices - Drysdale Properties, is in the top 10 of northern California-based brokerages by sales volume.

We're also in the top 30 brokerages state wide.

Overall we stand in the top 100 brokerages nation wide.

Not bad for a company that's just a few years old.

Good to know®